When it comes to the reliability of online brokers, we often hear about regulation. More specifically, we are talking about regulation, accreditation or licensing by regulatory bodies. And among these, some are regularly mentioned, in particular the AMF (Autorité des Marchés Financiers) and CySEC. What is the difference between these two entities?
For several years now, the AMF has been issuing authorisations to online brokers, after extensive checks. These operators can then also exercise and offer their services. The AMF has three main missions: regulation, information and protection. This organization is also firmly on the side of investors. He does everything possible to inform the latter and to protect the savings that have been committed. In any case, it plays a major role in the functioning of financial markets.
In this context, the AMF regulates operators, but also products on the French financial markets. He is therefore closely interested in the latter, but not only. This regulator also looks at listed companies, financial intermediaries and collective investment products placed on the stock exchange. One thing is certain: when an online broker is approved by the AMF, it is a guarantee of reliability, especially in France. On MassLib we mainly focus on brokers approved by the AMF as Interactive Options.
What about the CySEC?
CySEC is often mentioned in the regulation of online brokers. Moreover, many brokers have a licence issued by this Cyprus-based authority to operate on the European market. The advantage of this approval lies, among other things, in the requirement for a segregated account for regulated brokers. In this way, the latter guarantee the separation of their equity and the money of their traders. In the event of bankruptcy, in particular, it is impossible for interested brokers to use their clients’ accounts to repay their debts. In the benefits register, there are the many controls carried out, particularly on the trading platform operated.
In any case, it must be taken into account that Cyprus is a real tax haven for brokers. This regulator is rather lenient towards the latter. To ensure the reliability of an operator, it is better to rely on AMF approval. Moreover, in the event of a dispute, CySEC’s guarantee can never replace that of the AMF (which also works jointly with the Banque de France and the ACPR or Autorité de contrôle prudentiel et de résolution pour la délivrance des agréments).
In all cases, it is essential to turn to a regulated broker (preferably by the AMF, or by as many regulators as possible for greater serenity). This avoids being unprepared in the event of an incident and limits the risk of losing money.